They say that when you hit rock bottom, there’s only one way to go – up. But the problem, for gold and silver at least, is knowing when we’ve reached that bottom.
Since last week, a number of analysts have warned that the end of the gold plunge is upon us based on several key market signs.
For instance, Resource Investor posted a report saying:
Precious metals are becoming extremely oversold and the bear market is clearly in the 9th inning. Be on alert for a snapback rally to repair the extreme oversold conditions.
Likewise, Kitco recently commented:
Importantly from a technical perspective, given that new contract lows were scored in both gold and silver futures Friday (11/7) morning, the bullish outside days up are also termed a more technically significant bullish “key reversal” up. A key reversal up is one early, significant chart clue that at least a near-term market bottom is in place.
Not everyone thinks the worst is behind us quite yet though. Gluskin Scheff chief economist and strategist David Rosenberg told Yahoo Finance that he predicts “a classic 61.8%” Fibonacci reversal.
“Make no mistake, there is likely more pain coming to the gold market before the final capitulation is turned in, and the plunge from the highs (around $1,900 per ounce) has to be taken into the context of the parabolic move from the secular lows ($250 per ounce)” said Rosenburg.
Only time will tell who is right.
Photo courtesy of resourceinvestor.com